Stereotaxis
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10-K
STEREOTAXIS, INC. filed this Form 10-K on 03/15/2019
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As a result of stock issuances which occurred during the year, the Company believes that an ownership change may have occurred under Section 382 of the Code. Any change could significantly limit the value of the existing net operating loss carryforward. The Company is currently evaluating the impact of the warrant exercise on the availability of its U.S. net operating loss carryforward. Refer to Note 10 for a full discussion of the Company’s equity transactions.

 

The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. As the Company has a federal net operating loss carryforward from the year ended December 31, 1999 forward, all tax years from 1999 forward are subject to examination. As states have varying carryforward periods, and the Company has recently entered into additional states, the states are generally subject to examination for the previous 10 years or less.

 

At December 31, 2018 and 2017, the Company had less than $0.1 million in reserves for uncertain tax positions. The Company recognizes interest accrued, if any, net of tax and penalties, related to unrecognized tax benefits as components of income tax provision as applicable. As of December 31, 2018, accrued interest and penalties were less than $0.1 million.

 

13. Net Loss per Share

 

The following is a reconciliation of the numerator (net loss) and the denominator (number of shares) used in the basic and diluted earnings per share calculations:

 

   Twelve months ended December 31, 
   2018   2017 
Net income (loss)  $116,756   $(5,887,410)
Deemed dividend on convertible preferred stock        
Cumulative dividend on convertible preferred stock   (1,434,000)   (1,432,259)
Net loss attributable to common stockholders  $(1,317,244)  $(7,319,669)
           
Weighted average number of common shares and equivalents:   52,082,618    22,614,248 
Basic EPS  $(0.03)  $(0.32)
Diluted EPS  $(0.03)  $(0.32)

 

The following table sets forth the number of common shares that were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive as follows:

 

   December 31, 
   2018   2017 
Shares issuable upon vesting/exercise of:        
Options to purchase common stock   1,165,086    413,301 
Series A Convertible Preferred Stock and Accumulated Dividends   41,743,654    39,537,501 
Restricted stock units   647,649    680,363 
Warrants   1,131,151    38,779,119 
    44,687,540    79,410,284 

 

14. Employee Benefit Plan

 

The Company offers employees the opportunity to participate in a 401(k) plan. For 2018, the Company recognized expense of approximately $0.2 million to match employee contributions up to 3% of each participating employee’s salary. The Company did not match employee contributions made in 2017.

 

15. Product Warranty Provisions

 

The Company’s standard policy is to warrant all Niobe, Odyssey and Vdrive systems against defects in material or workmanship for one year following installation. The Company’s estimate of costs to service the warranty obligations is based on historical experience and current product performance trends. A regular review of warranty obligations is performed to determine the adequacy of the reserve and adjustments are made to the estimated warranty liability as appropriate.

 

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